Some excerpts from an ethnographic study of the operations of a Wall Street financial trading firm, bearing on distributed cognition and joint-action planning:<\/p>\n
\nThis emphasis on cooperative interaction underscores that the cognitive tasks of the arbitrage trader are not those of some isolated contemplative, pondering mathematical equations and connected only to to a screen-world.\u00a0 Cognition at International Securities is a distributed cognition.\u00a0 The formulas of new trading patterns are formulated in association with other traders.\u00a0 Truly innovative ideas, as one senior trader observed, are slowly developed through successions of discreet one-to-one conversations.
\n. . .
\nAn idea is given form by trying it out, testing it on others, talking about it with the \u201cmath guys,\u201d who, significantly, are not kept apart (as in some other trading rooms),\u00a0 and discussing its technical intricacies with the programmers (also immediately present).\u201d\u00a0\u00a0 (p. 265)
\nThe trading room thus shows a particular instance of Castell\u2019s paradox:\u00a0 As more information flows through networked connectivity, the more important become the kinds of interactions grounded in a physical locale. New information technologies, Castells (2000) argues, create the possibility for social interaction without physical contiguity.\u00a0 The downside is that such interactions can become repititive and programmed in advance.\u00a0 Given this change, Castells argues that as distanced, purposeful, machine-like interactions multiply, the value of less-directd, spontaneous, and unexpected interactions that take place in physical contiguity will become greater (see also Thrift 1994; Brown and Duguid 2000; Grabhar 2002).\u00a0 Thus, for example, as surgical techniques develop together with telecommunications technology, the surgeons who are intervening remotely on patients in distant locations are disproportionately clustering in two or three neighbourhoods of Manhattan where they can socialize with each other and learn about new techniques, etc.\u201d (p. 266)
\n\u201cOne examplary passage from our field notes finds a senior trader formulating an arbitrageur\u2019s version of Castell\u2019s paradox:
\n\u201cIt\u2019s hard to say what percentage of time people spend on the phone vs. talking to others in the room.\u00a0\u00a0 But I can tell you the more electronic the market goes, the more time people spend communicating with others inside the room.\u201d\u00a0 (p. 267)
\nOf the four statistical arbitrage robots, a senior trader observed:
\n\u201cWe don\u2019t encourage the four traders in statistical arb to talk to each other.\u00a0 They sit apart in the room.\u00a0 The reason is that we have to keep diversity.\u00a0 We could really hammered if the different robots would have the same P&L [profit and loss] patterns and the same risk profiles.\u201d\u00a0 (p. 283)<\/p><\/blockquote>\nReferences:<\/em>
\nDaniel Beunza and David Stark [2008]:\u00a0 Tools of the trade:\u00a0 the socio-technology of arbitrage in a Wall Street trading room.\u00a0 In:\u00a0 Trevor Pinch and Richard Swedborg (Editors):\u00a0 Living in a Material World:\u00a0 Economic Sociology Meets Science and Technology Studies. <\/em> Cambridge, MA, USA: MIT Press.\u00a0 Chapter 8, pp. 253-290.
\nM. Castells [1996]:\u00a0 The Information Age:\u00a0 Economy, Society and Culture. <\/em> Blackwell, Second Edition.<\/p>\n","protected":false},"excerpt":{"rendered":"Some excerpts from an ethnographic study of the operations of a Wall Street financial trading firm, bearing on distributed cognition and joint-action planning: This emphasis on cooperative interaction underscores that the cognitive tasks of the arbitrage trader are not those of some isolated contemplative, pondering mathematical equations and connected only to to a screen-world.\u00a0 Cognition […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23,28,30,36,40,62,77],"tags":[],"class_list":["post-2592","post","type-post","status-publish","format-standard","hentry","category-decision-theory","category-forecasting","category-getting-things-done-intelligence","category-human-intelligence","category-joint-action-society","category-planning","category-team-working","p1","y2010","m11","d08","h13"],"_links":{"self":[{"href":"https:\/\/vukutu.com\/blog\/wp-json\/wp\/v2\/posts\/2592","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vukutu.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vukutu.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vukutu.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/vukutu.com\/blog\/wp-json\/wp\/v2\/comments?post=2592"}],"version-history":[{"count":0,"href":"https:\/\/vukutu.com\/blog\/wp-json\/wp\/v2\/posts\/2592\/revisions"}],"wp:attachment":[{"href":"https:\/\/vukutu.com\/blog\/wp-json\/wp\/v2\/media?parent=2592"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vukutu.com\/blog\/wp-json\/wp\/v2\/categories?post=2592"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vukutu.com\/blog\/wp-json\/wp\/v2\/tags?post=2592"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}